Maurice Tutor

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About Maurice Tutor

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Algebra,Applied Sciences,Biology,Calculus,Chemistry,Economics,English,Essay writing,Geography,Geology,Health & Medical,Physics,Science Hide all
Teaching Since: May 2017
Last Sign in: 402 Weeks Ago, 4 Days Ago
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Education

  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

Experience

  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 31 Jul 2017 My Price 7.00

City Sights, Ltd.

City Sights, Ltd., operates a tour and sightseeing business. Its trademark is the use of trolley buses. Each vehicle has its own identity and is specially made for the company. Gridlock, the oldest bus, was purchased 15 years ago and has 5 years of its estimated useful life remaining. The company paid $25,000 for Gridlock, and the bus could be sold today for $20,000. Gridlock is expected to generate average annual net cash inflows of $24,000 for the remainder of its estimated useful life.
Management wants to replace Gridlock with a modern-looking vehicle called Phantom. Phantom has a purchase price of $140,000 and an estimated useful life of 20 years. Net cash inflows for phantom are projected to be $40,000 per year.
Assume that (1) all cash flows occur at year end, (2) each vehicle’s residual value equals 10 percent. Use Tables 1 and 2 in the appendix on present value tables.

Required
1. Compute the present value of the future cash flows from Gridlock.
2. Compute the net present value of cash flows if Phantom were purchase.
3. Should city Sights keep Gridlock or purchase Phantom?

Answers

Maurice Tutor
(5)
Status NEW Posted 31 Jul 2017 08:07 PM My Price 7.00

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